China's blast-furnace capacity use nears 2.5-year high

After a short dip in the previous week, the blast furnace (BF) capacity utilization rate among 247 Chinese steelmakers under Mysteel's survey nudged up again during August 25-31, gaining by 0.5 percentage point on week to hit a new high of 92.27% since early March 2021, according to Mysteel's latest survey.

Meanwhile, the surveyed mills' BF operational rate edged up 0.73 percentage point on week to 84.09%, and the daily hot metal output among these mills accordingly increased by 13,500 tonnes/day to hit 2.47 million t/d, the survey showed.

Market sources attributed the production uptick to the fact that some mills brought their BFs back online after their short maintenance stoppages. " This week a total of eight (blast) furnaces restarted, mainly at steelworks located in East, North, Northeast, and Southwest China," a market watcher based in Shanghai said.

Chinese steelmakers remained enthusiastic about production, hoping that domestic steel demand would rise with the approaching of autumn - a traditional peak season for steel consumption, Mysteel Global learned.

Over August 25-31, the daily consumption of imported iron ore among the 247 sampled steelmakers averaged 3 million t/d, rising 14,400 t/d on week, according to Mysteel's survey.

With their immediate needs for feed materials staying high, the steelmakers saw their total inventories of imported iron ore pick up 0.3% on week to reach 3 million tonnes as of August 31, including the volume at their steelworks, port stock yards and on the water, the survey showed.

However, more steel mills started to struggle with negative profit margins this week as the prices of the feed materials hovered at a high level, Mysteel Global noted. By Thursday, only about 45% of the sampled 247 mills managed to earn some profits, down by 6 percentage points on week, according to Mysteel's assessment.

"Shrinking margins may cool steelmakers' enthusiasm for production to some extent," the market watcher believed.

Written by Anthea Shi, shihui@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.